How to Secure a Mortgage for Your Dream Home

Many are those who are visualized in the future receiving the keys to your dream home and that they become owners of what, from then on, will be their home. However, buying a home involves a large outlay of money that easily exceeds hundreds of thousands of euros, so it is impossible to provide the total price of the property at once. Given this scenario, it becomes it is essential to request a mortgage credit to a bank to be able to buy the house in which we will spend most of our lives.

“The mortgage loan allows us have a large amount of moneyusually, to buy a home or rehabilitate it, “they maintain from the Bank of Spain (BdE). This credit will be granted in exchange for it being repaid in the long term in addition to having to pay some interest.

Usually, when financing the purchase of a property, banks are willing to cover up to 80% of the price of the home to be mortgaged. Therefore, this means that “the remaining 20% ​​of the price of the house must come from your own savings”, delivering said amount as input at the time of purchase, as indicated by the idealista real estate portal.

In addition to this 20%, those expenses incurred in the home buying process must also be taken into account. These expenses usually amount to around 10% of the price of the houseTherefore, to buy a house and request a mortgage, it will be necessary to have approximately 30% of the value of the house in savings.

Can you request a mortgage without savings?

“In most cases, banks do not look favorably on these types of operations, since they involve more risk due to the high level of indebtedness they imply,” says the real estate portal. Despite the fact that requesting a mortgage without savings “is not the most advisable thing”, from idealista they highlight a series of options that can help us achieve it:

• Have an endorsement: in the case of not having saved 30% of the value of the house, you can count on a guarantee to obtain a mortgage. The guarantee is a third person who undertakes to answer for the mortgage debt in the event that the owner of the mortgage cannot pay the installments.
• Rent with option to buy: Another way to get a mortgage without savings is to use rent-to-own. This option “allows the buyer to rent up to 5 years in the house they want to buy”, indicates the real estate portal. After that time has elapsed, the purchase is made, but discounting the rent that has been paid during that time from the price. In this way, the money that must be disbursed is less, which allows access to a mortgage more easily.
• 100% mortgages: Those people who do not have enough savings or solvency to pay 30% have the alternative of applying for a mortgage without down payment. The main advantage of this type of mortgage is that the bank will not ask loan applicants to have savings, since the bank will facilitate its full financing, that is, the 100% of the acquisition. However, in any case, “it will always be necessary to have 10% of the price of the house to be able to pay the expenses of managing the purchase of the house,” says the real estate portal.